SARS putting big crimp in business dealings with China

Leslie Plass makes as many as a half-dozen business trips annually to China in search of interesting dinnerware to import and sell.

But he's staying close to home these days. Fear of SARS, which has sickened thousands in Asia, will keep him away, the Addison businessman said.

"I cannot see a time when I will be able to get back," said Plass, president of Tradeco International Corp., one of thousands of U.S. manufacturers and importers that relies upon China as their low-cost supplier of manufactured goods.

His suppliers can come to Chicago if they really need to see him, he said.

"They can stay in quarantine for 10 days, and then we'll talk. Based on what is going on in China today, the potential for danger is horrific."

Increasingly, American businesses say the spread of severe acute respiratory syndrome is affecting their operations. United Airlines and Northwest Airlines, the two dominant U.S. carriers in Asia, have reported weak bookings in Asia due to the disease.

Motorola said Tuesday that it had temporarily shuttered its Beijing headquarters after an employee fell ill. And companies such as McDonald's Corp., Goodrich Corp. and Eastman Kodak Co. have cited worries about SARS in their first-quarter earnings reports.

Although shipments out of China do not appear to be affected at this point, efforts to develop products or open sales offices are at a standstill.

"We are unable to view new products or launch new products in China because we haven't seen the products or the factories," said Glenn Davis, president of Tablecraft Products Co. in Gurnee.

"If this goes on for a continuation of time, it certainly will impact what goods are available here in the United States."

So concerned are manufacturers and importers that HOFEX 2003, the largest annual trade show bringing together American businesses and Chinese manufacturers, has been postponed until July 15, a date some people believe is optimistic given the continuing spread of SARS in China. The show, to be held in Hong Kong, had been scheduled to open Tuesday and run through Friday.

"Our primary objective in rescheduling HOFEX 2003 is to safeguard the well-being of our exhibitors and visitors," said Daniel Cheung, general manager of Hong Kong Exhibition Services Ltd.

The disquiet of Plass and other U.S. manufacturers may be warranted, according to new research disclosed this week by British researchers. SARS eventually may kill nearly one in five victims in Hong Kong, the researchers said in an article published by the Lancet medical journal.

It remains to be seen whether SARS will be an ongoing problem.

The World Health Organization said Wednesday that 6,903 SARS cases have been diagnosed worldwide. Of those, 495 have died, the organization said. In China, 4,560 cases have been diagnosed, and 219 have died. The WHO has lifted travel advisories for Toronto and Vietnam, while the U.S. has downgraded a travel advisory for Singapore to a travel alert.

Bruce Lieberman, vice president of sales for the Sterno Group in Des Plaines, said there is no question that some operations are being affected. Sterno manufactures heating cans used to keep chafing dishes hot.

"We're looking to launch some new things over there, and it is somewhat on hold," said Lieberman, who believes that China will remain a major supplier for U.S. business. "We're proceeding, but not as quickly as in visits to the factories."

Keith Jaffe, co-owner of Vernon Hills-based Focus Products Group, sees SARS as a longer-term problem for business in China. He said that his concerns about the disease prompted him in December to ban travel to China by any of his employees. He imports upscale kitchenware and wire shelving.

"We have great concerns about doing business in the Orient until this is resolved," Jaffe said. A company representative has been sent to India to explore whether manufacturers there are capable of making the same products that now are made for Focus in China.

Plass, who last year completed his latest round of product-development meetings, said that work now will have to be done in other ways.

"We could not have picked a better time if we are forced into a position of having to work from afar," he said, citing e-mail, digital photos and the telephone that can be used to communicate with his Chinese counterparts.